ISLAMABAD – The Ministry of Finance on Friday told the Pakistan International Airlines management that although it was unable to extend it any financial help, it was ready to submit a revival plan to the prime minister for consideration. In a high-level meeting, the Ministry of finance discussed the revival plan with initial restructuring of the PIA and decided to take a final decision on its financial and administrative restructuring in the next meeting, expected next week.
Like other public sector enterprises (PSEs), the government intends to also re-constitute the PIA board of directors and the private sector would also be given representation in the PIA BoD, official sources informed. According to a source, the meeting on restructuring of PIA discussed the restructuring of the BoD, criteria for the directors to be included in BoD and criteria for the private sector directors in BoD.
Minister for Finance Hafeez Shaikh, Minister for Law and Justice Babar Awan, the minister for defence, minister for privatisation, defence secretary, Planning Commission Deputy Chairman Dr Nadeemul Haq and PIA officials participated in the meeting. The Finance Ministry has already turned down a request by PIA for an immediate provision of Rs 12 billion to Rs 15 billion to save the carrier.
However, the ministry asked the PIA management to meet their financing needs from the local market by improving the management. Friday’s meeting asked the PIA management to come out with concrete and practical suggestions for the revamping and reorganising the airlines. A presentation was also given to the meeting on the financial summary from 2001 to 2010, which include operational expenses, revenue earning, affects of the increase in oil prices, excessive employment, the devaluation of Pakistani currency in the capital market, and its impact on the overall financial conditions of the airline.
In its presentation, the management highlighted the requirements of the PIA in terms of financial support, and said the airlines received no allocation of funding from the government from year 2009.
